Reaching a billion: target set by Askar Mamin in Bishkek
Prime Minister of Kazakhstan Askar Mamin paid an official visit to Tajikistan and Kyrgyzstan. Following the talks with President Emomali Rahmon, 11 documents on bilateral cooperation worth $80 million were signed in Dushanbe. In Bishkek, Mamin took part in the 8th meeting of the Kazakh-Kyrgyz Intergovernmental Council, and agreed with President Sooronbay Jeenbekov to bring the mutual trade turnover to $1 billion.
At the meeting with Jeenbekov, Mamin also discussed the upcoming visit of Kazakh President Kasym-Zhomart Tokayev to Bishkek in October. At a meeting with Kyrgyz Prime Minister Mukhammedkalyi Abylgaziev, the head of the Kazakh government stated there is significant potential in the sphere of bilateral and regional trade. He stressed the importance of combining the countries' joint efforts to attract investment in the Central Asian region by improving the business climate and supporting small and medium-sized businesses. "We possess all necessary means for implementation of existing potential of trade turnover increase," Askar Mamin said. "The decisions made during the meeting of the Intergovernmental Council will lead to a strengthening of cooperation between our countries and will give a major impetus to bilateral economic relations."
"We have the EEU format, where we cooperate on multilateral matters and I must say that we have a common understanding in all current issues related to the development of bilateral relations in the all aspects of bilateral and multilateral cooperation," Askar Mamin stated. "Last year we achieved an increased in trade turnover, but at the same time, we believe that the potential for the development of bilateral trade is much higher, and for our part, we are ready to consider all relevant issues the solution of which requires the adaption of relevant documents."
Abylgaziev responded that "the Republic of Kazakhstan is among main trade partners of Kyrgyzstan. The share of Kazakhstan in Kyrgyzstan's trade turnover exceeds 11%, while its share in export is 14%," Abylgaziev noted. In 2018, commodity turnover between the two countries rose by 13% and reached $850 million. The two governments have set a target to increase the volume of mutual trade turnover to $1 billion by 2020. However, this goal was set by first president Nursultan Nazarbayev back in 2018.
Meanwhile, experts doubt that countries will be able to reach $1 billion. First, 10 of the 11 documents signed are memoranda, so they are unlikely to ever work. Second, Kyrgyzstan has no industrial capacity to perform these tasks. Third, Kyrgyzstan loses in bilateral economic cooperation. And the situation is not expected to change in the future.
"Goods from Kazakhstan account for 60-70% of the total trade turnover between Kyrgyzstan and Kazakhstan. Kyrgyzstan mostly exports dried fruits, honey and medicinal herbs. In any case, President Jeenbekov suggests this set during his foreign trips. Kazakhstan imports to Kyrgyzstan oil and oil products from bituminous rocks (except raw), wheat, coal, wheat flour, vegetable oil, inorganic chemicals, mineral raw materials,flat-rolled products of iron and stainless steel," Director General of the Analytical Center 'Strategy East-West' Dmitry Orlov told Vestnik Kavkaza.
It should be noted that Kyrgyz products at the Kazakh border are strictly inspected and, under the pretext of being smuggling from China, Kyrgyz goods are not allowed into the Kazakh market. "Kyrgyzstan is a regional leader in smuggling of goods. Our organization, which has existed since the last century, compared the statistical customs data provided by neighboring countries. If the difference in numbers exceeds 50%, obviously this is smuggling," chairman of the board of trustees of the Civic Foundation Transparency Kazakhstan Marat Shibutov told Vestnik Kavkaza.
In particular, over the past 20 years, the Kyrgyz customs registered goods from China totaling $11.64 billion. At the same time, according to the Chinese Customs, goods worth $61.667 billion were transported across the border in the direction of Kyrgyzstan. The difference is $50 billion. In 2017, the Kyrgyz customs registered Chinese goods worth more than $1.5 billion, while the Chinese one - $5.337 million. The difference was almost $3.9 billion. From Turkey, the volume of deliveries amounted to $1.129 billion for the same 20 years, and according to the Turkish customs, goods worth $2.968 billion were sent. The difference is $1.839 billion.
The expert explained that the Kyrgyz elite live at the expense of smuggling: "One may think what does that have to do with Kazakhstan. But the fact is that customs payments are received by the EEU general fund, and then divided according to the established proportions. Up to 2020, Kyrgyzstan’s share in the EEU customs duties is 1.9%, which in reality is higher than the transfers they make. In fact, the Republic of Kazakhstan, the Russian Federation and the Republic of Belarus sponsor the budget of the Kyrgyz Republic at their own expense," Shibutov said.
According to the expert, smuggling was exceeded by 150% in Kazakhstan. The government responded to the fund's appeal, it was supported by the Kazakh senators. The Kazakh customs were inspected inspection, which resulted in arrests of local staff. Today, the difference between Kazakh and Chinese statistics at the Khorgos checkpoint was 50%.
The Kazakh border detained Kyrgyz cargoes for political reasons, in particular, when Bishkek accused Astana [the former name of the capital of Kazakhstan - VK] of interfering in the internal affairs of Kyrgyzstan, because Nazarbayev met with one of the Kyrgyz presidential candidates. In response, Kazakhstan closed the border. Hundreds of trucks containing agricultural product were stuck at a border checkpoint.
But, according to Orlov, the problems with Nur-Sultan has begun a long time ago, and the scandal with Atambayev only exposed these problems. Since Kyrgyzstan is the EEU member, issues should be addressed within the framework of an integration association, the ultimate goal of which was the creation of a single economic space, which means free movement of goods and services. According to the expert, before Kazakh President Tokayev's visit to Bishkek, all issues with cargo carriers should be resolved, since Kazakhstan has increasingly emerged as an unfriendly state to Kyrgyzstan lately. This point of view prevails in Kyrgyzstan now.